The international manager Purpose: TATA Motors

Answer

The international manager Purpose: TATA Motors

Introduction

International business comprises of all the commercial transactions made between two or more countries that are beyond the political boundaries. In essence, international business is the exchange of goods and services between persons in multiple nations. In the world of business today, there is stiff market competition between companies and so many organizations have grabbed the opportunity of going global and investing in other countries apart from their host country. International trade is one of the revenue sources for most developing countries. International business has also influenced the growth of globalization (Comfort & Franklin, 2014). The benefits of international business are that it has been a key driver of international economic growth in the 21^st century.

Nations with strong international trade have been able to control the world economy and so global trade can be termed as a major contributor to reduce poverty in the world. Although the international manage performs similar functions as the domestic manager, there are some areas that they are expected to adjust depending on environment and variables in the international business (Zsolnai & Tencati, 2009). Planning, organizing, staffing, directing,  and controlling are some of the functions of a manager but at the global sector, these functions tend to be more precise and complicated and so the international manager has to conduct them using different approaches and demographics. Multi-national corporations have become the main actors when it comes to the drivers of the global economy (Becker-Ritterspach & Bruche, 2012). The result is that there is a world economy that favours many corporate nations and their investments abroad. Tata motors has been able to venture into the global market with its market acquisition proving to be great. The company enjoys its position in the international markets by launching several products in different markets worldwide.

Challenges facing International Manager of TATA Motors

Increasing Economy

Although TATA motors has the desire to expand its business globally, this can only be possible if they replicate their domestic success and advance in their market strategies. The recent success of TATA in launching it Jaguar Land Rover is good start for its international ventures although acquiring such a model in the global economic crisis session was a great risk for TATA. This of cause strained the cash supply at TATA and the company is now required to raise billions in debt to be able to finance the purchase (Becker-Ritterspach, & Bruche, 2012).  It is important to know that TATA has successfully been able to penetrate the markets in the global markets by focusing on its global expansion in countries with similar market sales as India. With the inflation rates going higher together with high interest rates on goods, the demand for expensive autos has gone down affecting TATA’s global venture. Most low- income earners are no longer interested in purchasing expensive vehicles, which could be a future problem for TATA.

Individualism Political Environment

TATA motors products are exported to various countries across the globe and the company still plans to expand its international environments to several environmental markets. However, the company has become the subject for many risks associated with domestic and global marketing strategies (Singh & Shalender, 2014). TATA’s operations on the global markets may be affected by the political instability in various countries as well as multinational conflicts that arise frequently (Becker-Ritterspach & Bruche, 2012).  Conducting its business in the global sphere especially in the emerging demographic markets exposes the company to greater risks among them adverse changes in economy and government regulations. The unpredictable shifts and regulations with unclear regulations and tax systems could be a great problem for TATA in the global markets and procedures.

Human Rights

TATA considers all the labour regulations in accordance to the labour union rights in different countries although the company does not adhere to all the human right regulations set by member nations. In future, the company is likely to face labour unrest due to ignorance of employee rights. Some of these employees are subjected to poor working environments and are not happy about their rights being deprived by the company. Their wages are covered by wage agreements where applicable (Becker-Ritterspach, & Bruche, 2012). 

Ethical Differences

Each country has its designated ethics that every business has to follow. This has become a great challenge for TATA, as it has to adhere to all the ethical rules set in every country it wants to venture. This has also left the company at the risk of being considered unethical in certain countries (Singh & Shalender, 2014).

Competition

The global automotive business has become highly competitive s competition has been made intense by the continuing globalization in the world motor business. The competition for TATA is likely to increase as each market participant tries so hard to retain his or her market position in established markets (Becker-Ritterspach & Bruche, 2012). Some of the factors affecting competition include quality of the products. TATA faces strong competition both domestically and globally. The domestic competition in India is likely to get intense in the future (Singh & Shalender, 2014).

Corporate Social Responsibility

The automotive business is subject to several government regulations regarding how they produce their vehicles to emission of waste by vehicles. Some of these issues are likely to incur extra expenses for businesses and affect the future of the business in the global markets. While the company to thriving hard to meet some of these standards in various countries the cost of compliance is having a direct impact on the company’s revenues (Singh & Shalender, 2014).

Technology, Innovation Changes Across the Border

One of the company’s key goal is to enhance its status as the leading manufacturer of premium vehicles by improving the quality of its vehicles. The strategy set by the company is meant to maintain and improve the competition by developing vehicles that are technologically advanced and easy to use (Becker-Ritterspach & Bruche, 2012).  Over the years, the company has been able to maintain its pace but competition has proven to be tough in terms of technology innovation across different companies. The company is now pursuing to improve on various aspect in the international markets to enhance customer satisfaction and reduce competition.

Opportunities

By targeting customers from the third world countries, TATA has the opportunity to get higher revenues from its sales. This is because third world countries have the potential to buy motors from TATA industries compared to other countries. Another opportunity that TATA has is joining its ventures with other companies to provide an equal chance for all its companies to excel globally (Singh & Shalender, 2014).   This strategy has proven to be successful for many companies operating on the global markets. Smooth induction of new marketing models every year with diversity while dealing with a wide number of automobiles will increase their revenues globally (Singh & Shalender, 2014). The concept of producing commercial, passenger and utility vehicles will be a great opportunity for the company to increase its revenue and market shares. Notably most TATA luxury cars are receiving a good feedback from their market ventures apart from the fact that their safety requirements have not yet been met.

TATA has a good opportunity to exploit bigger markets in India and china where there are larger populations. Equally, TATA has the advantage of having knowledge of the emerging economies in the world markets. For instance, china’s government forecasts that the demand for cars will increase by 20 million by 2020. If consumers get more sophisticated, then the need for more luxurious vehicles will go up and this could work as an opportunity for TATA motors since most of their luxurious brands are cheaper than other brands from other companies (Singh & Shalender, 2014). TATA should be able to work on the international markets and acquire customers from every corner of the globe. The new Indian government is willing to help TATA recover from its previous losses. With its new products, TATA has the opportunity to launch them in the coming months and create a new purchase excitement to purchasers. While the domestic markets for TATA has been able to provide TATA with overwhelming market penetration in the previous years, global market growth will make sure that the company experiences the profitability rates it has always wanted by improving on its domestic and global markets (Becker-Ritterspach, & Bruche, 2012). 

Challenges V/S Opportunities

The main challenge facing TATA motors is competition from other companies prompting the company to work towards catching up with the terms of quality and lean production to bet competition locally and internationally (Singh & Shalender, 2014). However, the company still has an advantage when it comes to competition due to its brand name, which many have come to love. Sustainability and environmentalism could be another emerging challenge and could incur extra costs for the company depriving the company its competitive advantage. However, there is still hope that the company will be able to venture into the global markets with fewer challenges as it has support from the local government. Since the company focuses on commercialization of small vehicles, there is great risk of competition from other international companies for emerging luxury vehicle segments. However, by producing luxury vehicles that are less expensive, the company will be able to beat competition from the global markets (Becker-Ritterspach, & Bruche, 2012).  Due to rising prices in the global markets, TATA motors could face financial constrains on a number of fronts. However, this could be resolved by using less expensive raw material in production. Issues of safety if not dealt with in the right manner would likely damage the brand name of TATA creating friction in its market ventures.

Conclusion

Overall TATA motors is a strong company and has been able to maintain its strengths and expansions through its mother company and through numerous acquisition, and merges in the global markets. Although the company’s stock prices have fallen since 2008, due to its market segmentation, the company is trying hard to maintain its place in the markets. TATA has been able to hold its market position over the decades and is still working towards improving its market share in future. TATA motors, which so far is India’s largest automobile company, has proven its capability in the automobile industry by retaining its market segmentation locally and globally. The company has been able to reach broader domestic markets as well as global markets. The fact that the company has been able to venture into twenty-six different countries in the world leaves it vulnerable to many threats among them political instability, economical shifts, socio-cultural differences and technological innovation issues. TATA motors is likely to face many competitors locally and globally but to be able to stand and conquer them all, the company has developed new products and keeps on innovating others giving it a competitive advantage from its competitors.